HSBC has reiterated its commitment to small mortgage brokerages and other small and medium sized firms in the form of an £80 million a year spend on a range of initiatives for small businesses.
The bank will comply with regulations to pay credit interest of 2.5% below base rate on business current accounts. In a move to make banking more straightforward and transparent for the nation's small businesses, HSBC is also committing over £30 million a year to a series of changes.
This includes automatic payment of credit interest to business current account holders with a turnover of up to £25 million. To date, other banks are relying on customers to contact them and request interest on their account.
The launch of a new instant access savings account - Business Money Manager - is worth an extra £25 million a year to customers.
HSBC says these changes exceed the recommendations of the Competition Commission Inquiry.
Graham Picken, general manager of commercial banking at HSBC, says: “The Competition Commission found that HSBC provides the highest quality of service and some of the lowest prices in the market. Now we have taken the opportunity to up the stakes in UK business banking and continue to prove that not all banks are the same.”
He adds: “We were required to offer either credit interest or free money transmission but we have gone the extra mile to ensure our customers benefit from our new products and prices with no effort on their part. As a result of these simple and transparent changes, customers will be better off by an average of £148 a year.”
HSBC research finds that three-quarters of small firms are not aware that a Competition Commission Inquiry into small business banking has taken place, although about half said that interest on current accounts would make a difference to their cash flow.
Picken says: “Our customers appreciate products that are straightforward and simple to understand – we do the work and they get the benefit. It's about making life easier for busy people who want to concentrate on running their business.”